Moldova Steers A Path To Democracy And Reform
Moldovans went to the polls four months ago and elected a pro-Russia president. That could worry Americans, but the good news is that the political party I head, the Democratic Party of Moldova (PDM), still holds the majority in parliament and leads the government, and we have no intention of changing Moldova’s pro-US, pro-European Union policies.
In fact, Moldova is seeking opportunities to deepen ties with the West and more specifically the US Congress, the new administration and the American business community.
Michigan-based Lear Corporation is all in. They recently celebrated the seventh anniversary of their cut-and-sew plant in central Moldova, which produces seat covers for the Ford Mondeo, Toyota Aygo, the Peugeot 107 and the Citroen C1. And, last year, the US government provided $45 million in assistance to Moldova.
True, Moldova has had its challenges – most notably corruption and weakness in our banking system. But the governing coalition, led by the PDM and Prime Minister Pavel Filip, has tackled these problems head-on with comprehensive political, economic and banking reforms that are strengthening the rule of law, liberalizing our economy and modernizing our society. Since the PDM joined the government in January 2016, we have been making progress to eliminate corruption and are committed to restoring stability and prosperity.
Our progress has been recognized by the International Monetary Fund (IMF), which approved $178.7 million to support Moldova’s economic and financial reforms; the World Bank, which authorized $45 million to support our government’s efforts; and the European Commission, which disbursed $47 million to help restore economic stability and reform our banking system.
We still have unique and serious issues. Moldova shares a 747-mile border with Ukraine, which has a well-known conflict with Moscow over Russia’s 2014 annexation of Crimea. We, too, have a territorial dispute in an area of Moldova called Transnistria, a strip of land along the border with Ukraine where separatists are supported by about 1,500 Russian troops.
This makes for a delicate situation that our Russia-leaning president, Igor Dodon, could use as a wedge to divide our people. And Moscow seems happy to oblige, harassing our lawmakers at Russian airports as part of a campaign to thwart Moldova’s investigation into corrupt Russian officials who used our banks to launder billions of dollars in stolen loot.
Through it all, however, the United States has stood by us with patience and resolve. This is the sign of a legitimate partnership. America’s support — $1.4 billion since our countries established relations 25 years ago — has included funds not only for economic development, education, social services and healthcare, but also for democracy, human rights and governance.
Moldova has responded to these incentives and continuous support by deepening our democracy, strengthening our justice system and liberalizing our economy and society. These are the hallmarks of the coalition that the PDM has forged to drive our country toward the West.
It is, of course, a two-edged sword. Committed to democratic values, our government last November held free and fair elections, and our citizens – disappointed that democracy has not brought quicker and greater rewards– elected Dodon to the largely ceremonial post of President. We acknowledge the risk that such a result can be replicated during the 2018 parliamentary elections, but we are determined to make even more democratic progress before then.
Nonetheless, the government is not hesitating. We have deepened our commitment to the people and strengthened our dedication to freedom and the West. We ask that our partners, particularly the United States, respond in kind.
We have opened our doors to foreign investors. Our corporate income tax rate – 12 percent — is lower than in Romania, Russia, Italy and Slovakia. Moldova has agreements with 48 countries prohibiting double taxation of corporate earnings. There will be new investment opportunities as we privatize key industries such as transportation (including Air Moldova, our national carrier), telecommunications and information technologies, and electrical distribution networks. Our legal system has been harmonized with other free-market economies throughout Europe and protects foreign investors against expropriations.
Moldova offers special regulatory and tax relief in nine free economic zones and 10 industrial parks. We place priority on developing sectors including agriculture, wine and food processing, auto parts, machinery, clothing and footwear and electronic devices. Moldova has a comprehensive free trade agreement with the EU and participates in trade agreements providing access to more than 800 million consumers.
Moldova is a small country on the front line of democracy. It is neither naïve about its challenges nor afraid of its opportunities. We ask our partners to recognize, as we do, that Moldova’s progress will continue to require the support of Western allies who appreciate how far it has come and how far it can go.
Vladimir Plahotniuc is Chairman of the Democratic Party of Moldova, the main party in the nation’s governing coalition.